How Tech Companies Can Help Upskill the U.S. Workforce

Executive Summary

In 2015, there were 7 million jobs that required some level of coding skills, and programming jobs are growing 12% faster than market average. But to meet this demand and address income inequality, we have to provide better access to technical learning for those who work in lower-paying industries. It’s now time for business, particularly technology companies, to harness the power of technology to help turn the tide. Three key initiatives can help: Supplementing K-12 with vocational training programs, increasing access to job retraining for adults, and empowering lower-skilled workers to continuously ‘upskill’ on the job.

jennifer maravillas for hbr

Software businesses are disrupting generations-old industries, from agriculture to entertainment. Programming wizards are amassing billion-dollar fortunes, and this may be just the beginning. Even average tech employees in their mid-twenties are raking in 6-figure paychecks.

Unfortunately, a huge section of the workforce cannot capitalize on these opportunities. In 2015, there were 7 million jobs that required some level of coding skills, and programming jobs are growing 12% faster than market average. But to meet this demand and address income inequality, we have to provide better access to technical learning for those who work in lower-paying industries.

It’s now time for business, particularly technology companies, to harness the power of technology to help turn the tide. Three key initiatives can help: Supplementing K-12 with vocational training programs, increasing access to job retraining for adults, and empowering lower-skilled workers to continuously “upskill” on the job.

Supplementing K-12 with vocational training programs

By 2020, 65% of all jobs will require some college training. At current graduation rates, the U.S. will fall short of this goal by 5 million workers. Vocational Technical (VoTech) training programs for high school students are key to helping them specialize in in-demand technology-related fields, and be ready for the job market. While many wealthy schools already provide such courses, we need to bring these programs to underserved schools.

Generation, a 3-year old non-profit created by McKinsey, uses a bootcamp model to train and place underserved youth in careers in over 63 cities and across 20 professions. Its U.S. graduates have an 83% job placement rate as measured 3 months after the program, and it is scaling quickly, with 17,000 graduates and 1,600 employer partners globally.

Increasing access to job retraining programs for adults

Prior technology transformations in the workforce have taken place across generations. We are currently experiencing intra-generational job disruption, where the job you trained for at age 20 may not exist at age 40. So now we need to retrain workers mid-career. As a start, we should support job-retraining programs to help transition low-income, lower-skilled workers into well-paying technology jobs. Coding bootcamps that train wealthier college graduates for high-skill programming jobs are already trendy. But we need similar programs to serve workers without a post-secondary degree, who are seeking middle-skill jobs. MOOC providers such as such as Coursera, Khan Academy, and Udemy could expand their current focus and help develop courses geared squarely toward lower-skilled workers who want to develop entirely new skill sets.

To scale this model successfully, employers must broaden their screening criteria to accept applicants who have taken accredited tech courses, not just those with four-year college degrees. Community-based networks such as TechHire are bringing together forums of large employers and educators to provide access to the right training. And government can help: for example, the Department of Education has early pilots underway to allow students to use federal aid for learning coding skills.

The first step is for employees to identify the skills they need through counseling with trained managers. Second, they begin training through online courses, certification and degree programs developed by AT&T, Udacity, and Georgia Tech. Most employees spend 5-to-10 hours a week on retraining.

We should encourage more companies to provide on-the-job training to workers and to open up pathways for lower-skilled workers who want to move up in skills, titles, and pay. Governments could further incentivize employer-led programs through direct funding, tax incentives, challenge grants, or other catalysts.

The stakes are high and the time is right. Silicon Valley has created extraordinary wealth and has changed the nature of work. In so doing, it has also catalyzed unparalleled job disruption. It’s time for technology players – in Silicon Valley and beyond – to use the power of technology to more closely partner and coordinate with educators, employers, and government leaders – to make sure that every person in the American workforce is trained for success in the 21st century economy.

Kausik Rajgopal is the Managing Partner for the U.S. Western Region for McKinsey & Company.

Steve Westly is the former California State Controller and Managing Partner of the Westly Group, a smart energy & transportation focused venture capital firm in Silicon Valley.